The FAO Food Price Index fell nearly five points in March, driven by drops in the indices for all commodities except meat. The March Index remained 20 points above its year-earlier level, however.
The Cereal Price Index fell 2.7 points in March and was essentially the same as its March 2016 level. Global cereal supplies remain plentiful, and overall production prospects are favorable for the coming season.
The Vegetable Oil Price Index also fell for the second consecutive month, down 11 points. However, it remained above March 2016 and March 2015 levels. This month’s drop was driven mainly by good palm oil production prospects in Southeast Asia, particularly Indonesia, as well as improved harvest forecasts for soybeans in South America and higher soy plantings in the US.
The Dairy Price Index fell 4.4 points in March but remained almost 60 points higher than its year-earlier level. The Sugar Price Index reached its lowest level since May 2016, falling by almost 32 points.
The Meat Price Index was the only exception to the overall decreasing trend seen in March, rising slightly by 1.2 points. This Index also remains higher than its year-earlier level, driven mostly by strong import demand for bovine and pig meat.
The latest AMIS Market Monitor was also released last week and provides the first AMIS projections for the 2017-2018 commodity marketing season. The report forecasts continued stability in both supply of and demand for wheat, maize, and rice. Current global carryover stocks will be sufficient to cover any unanticipated shortfall in production in the coming season. For soybeans, the report forecasts both higher-than-expected supplies and expanding global demand.
By: Sara Gustafson, IFPRI